Author Topic: Underwriting  (Read 8080 times)


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Re: Underwriting
« Reply #20 on: February 28, 2009, 11:52:13 AM »
Why not focus on the part where insurers only earned about 8% on equity over the last 30 years and that most don't write insurance at a profit. Btw this is by design, it is the explicit goal of regulators to keep CR's around 100.

  You can huff and puff and wish all you want but until prices firm there isn't much they can do other than write less business.  Berkshire's insurance companies are not only AAA, one of them has an enormous marketing budget with a low cost structure.  Ajit Jain generates about 40% of the float with a group of 31 employees.  Lowest cost of capital+lowest cost producer = good underwriting.  It can't be replicated!

As an aside,
 Of the 16 billion in Muni's Berkshire insurers, Fairfax owns about 3.5 billion, and I'm pretty sure Hamblin Watsa belong to the group of investors he referred to as "sophisticated."